New York State Real Estate Salesperson Licensing Exam

What is the practice of convincing owners to sell or lease property by indicating a particular group is moving into the area called?

1. Gentrification

2. Blockbusting

3. Steering

4. Displacement

The correct answer is: Blockbusting

The practice of convincing property owners to sell or lease their property by indicating that a particular group is moving into the area is known as blockbusting. This unethical tactic exploits racial or socioeconomic changes in a neighborhood, often creating panic among homeowners that their property values will decline if a specific demographic enters the area. Blockbusting can lead to increased real estate sales for agents who use this practice, but it contributes to long-term community instability and discrimination. In contrast, gentrification refers to the process of neighborhood change due to the influx of more affluent residents, which can improve property values and often leads to the displacement of lower-income residents. Steering involves guiding homebuyers toward or away from certain neighborhoods based on their race or ethnicity, which is also discriminatory but focuses on the selection process rather than the selling of properties. Displacement describes the effect on existing residents who are forced to leave their homes due to economic pressures or changes in the neighborhood, but it does not encompass the act of persuading property owners to sell or lease their properties. This is why blockbusting is the correct choice in this context.